Cannabis Strategic Ventures (OTCMKTS:NUGS) entered a pact to acquire a ready-to-use Greenhouse facility for expanding its cannabis production. The move is to capitalize on the growing demand for cannabis.
Offer higher dividends to shareholders
CEO of Cannabis Strategic, Simon Yu, said the company gives priority to quality produce. Considering its recent improvements in sales volume, pricing, and output, the company intends to expand its production capacity to benefit from macro and micro factors and provide higher incentives to investors going forward.
Cannabis Strategic released LOI last week to get a 300,000 Sq. Ft. ready-to-occupy and use a greenhouse. Its acquisition will double the production capacity of Cannabis Strategic. The takeover allows the company improve sales by almost 100%. Increased volumes will help establish relationships with significant distributors and drive growth.
Excellent prospects for Cannabis Strategic
The legalization of cannabis is expected in the US later this year. It offers excellent growth opportunities for companies like Cannabis Strategic. The promising growth factors for Cannabis Strategic include improved sales volume, growing manufacturing capacity, and opportunities for higher margins.
Cannabis Strategic earned a higher premium of 11% for its latest harvest compared to the existing per pound standard for cannabis sales. The average per pound sales of cannabis in the US is $1,525. Therefore, the upward trend in pricing improves margins of Cannabis Strategic going forward. Simon said the quality of cannabis is playing a vital role in fetching higher prices for its products.
The recent expansion by 150% helped Cannabis Strategic to double the harvest size and satisfy the growing demand in Q2. Monthly sales growth in this quarter is averaged over 800% compared to Q1. Therefore, Cannabis Strategic expects to cross annual cannabis product sales of $10 million.
Better footprint in California
Cannabis Strategic maintains a strong presence in the cannabis space of California. The company is reporting strong growth MoM and QoQ, and achieved a breakout in Q2.
Cannabis Strategic reported record sales of over $870,000 in April this year. Its sales further improved to $920,000 in May 2020. The company recorded continued growth in June. According to Simon, the company will continue to achieve further organic growth going forward.